Riot Games tied its LCS to FTX for seven years — then asked a court to cancel the deal

Riot Games, developer of League of Legends, had signed a seven-year deal for FTX to sponsor its League of Legends Championship Series (LCS). FTX's founder Sam Bankman-Fried was a visible fan of the game and had written publicly about playing it.

After FTX collapsed and Bankman-Fried was charged with fraud and money laundering, Riot filed in FTX's bankruptcy case in December 2022. It asked the court to terminate the sponsorship, citing irreversible 'reputational harm'. Riot said its image and reputation with its customer base were 'inextricably linked' to the exchange.

The filing argued that images of Bankman-Fried playing League of Legends, shown alongside reports of his cavalier attitude towards investor meetings and corporate funds, had turned his interest in the game from 'relatable and human' into 'reckless and juvenile'. According to the filing, FTX still owed Riot $6.25M for 2022, rising to $12.875M the next year and escalating each year through 2028, for a total of around $96M.

Deal worth about $96M through 2028; Riot filed that FTX still owed $6.25M for 2022 and cited irreversible reputational harm.

Riot committed seven years of its flagship league's sponsorship, worth about $96M, to a single crypto exchange.

The sponsor's founder was publicly identified with Riot's game, so his fall attached directly to League of Legends imagery.

Once FTX failed, Riot could only seek an end to the deal by filing in FTX's bankruptcy case.

Riot said it wanted out immediately so it could sign another crypto sponsor for the 2023 season.

A long sponsorship ties your brand to the sponsor's conduct. When the sponsor fails publicly, the exit may have to be sought in a bankruptcy court.

The Verge reported that other FTX-sponsored organisations moved quickly: Team SoloMid stripped FTX from its name, the Miami Heat began looking for a new sponsor for its arena, and Mercedes' Formula 1 team suspended its deal and took the logo off its cars. The outcome of Riot's termination request is not covered in the source article.